In a landmark judgment which is likely to have repercussions on several other cases pending before NCLT concerning the homebuyers and the developers, NCLAT has set aside the order of National Company Law Tribunal (NCLT), which ordered appointment of IRP for Raheja Developers that had been issued a petition by the two homebuyers Akash Jain & Shilpa Jain against Raheja. The NCLAT now allows the Chairman & Managing Director, Mr. Navin Raheja, to take back the power on the Real-estate Company.
Why did Raheja developers face the NCLAT judiciary ?
The NCLT case involved Raheja Sampada, a residential housing project in Gurgaon by Raheja Developers. The interim resolution professional (IRP) is named when the bankruptcy proceedings are initiated.
What was the conculsion of the insolvency case against Raheja developers ?
The NCLAT Chairman SJ Mukhopadhyay said, “Appellant is relieved from all rigors as well as a moratorium, and thus, allows operating through its board of directors with the instant effect.”
Raheja Developers challenged the petitioners through proceedings with NCLAT in August 2019, against the complaint filed by the two homebuyers at NCLT for the alleged delay in delivery of the flats in Raheja Sampada. Both the homebuyers had applied under section 7 of the Insolvency and Bankruptcy Code (IBC) with malicious intent. The NCLAT observed that the respondents knocked the doors of the adjudication authority for the refund of money and not for the flat, which was for some other purpose rather than resolution and liquidation.
The buyers purchased a flat in August 2012 and were promised delivery in August 2015. They alleged the developer couldn’t give possession only in late November 2016. The Raheja Developers argued before the NCLAT that they had completed the project in 2013 and had applied for the completion certificate, for which the local authority delayed for issuing the document.
When the developer offered the possession in November 2016, NCLAT noted that both the buyers wanted the money back and that when the Raheja Developers agreed to pay the money along with interest, the buyers refused to accept the payment and offered for a higher percentage of money at 18% which was 9% higher than the actual principal amount. NCLAT stated in its judgment, “We noticed that in a large number of cases, the allottee is a speculative investment and not a genuine person interested in purchasing a flat, instead wanted to get the money back with coercive measures.”
Raheja Developers, thus, hoped that the order would set a precedent since the buyers have started moving the NCLT under the amended IBC, after being accorded the status of financial creditors. Mr. Navin Raheja said, “It is a win situation for us and our homebuyers who have trust and faith in us throughout our journey as Raheja Developers. We have always believed in maintaining dignity, and we will work the way we have set our goals and strategize the things in the same manner with maintaining the interest of our customers above everything.”